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2013 (1) TMI 1068
The Delhi High Court considered a writ petition challenging a notice issued under section 148 of the Income Tax Act, 1961, reopening the assessment for the assessment year 2004-05 of a company engaged in the manufacture and sale of polyester chips and film. The key issues considered and analyzed in the judgment are as follows:1. **Sanction Requirement for Notice under Section 148:**The petitioner contended that the notice issued under section 148 required the sanction of the Joint Commissioner of Income Tax as per section 151(1) of the Act. The Court clarified that such sanction is only necessary if the notice is issued by an officer below the rank of Assistant Commissioner or Deputy Commissioner of Income Tax. Since the notice in this case was issued by the Deputy Commissioner of Income Tax, no sanction was required. The objection was rejected.2. **Scrutiny of Disallowances in Original Assessment:**The petitioner argued that certain disallowances were scrutinized in detail in the original assessment under section 143(3), thus questioning the need for reassessment. The Court noted that the revenue did not dispute this contention, indicating that there was scrutiny in the original assessment.3. **Challenge to Retrospective Amendment under Section 115JB:**The petitioner challenged the retrospective amendment under section 115JB brought by the Finance Act, 2008, which affected the deferred tax liability. The Court rejected the challenge, stating that retrospective amendments are within legislative competence. The Court found no grounds to support the challenge and noted that the petitioner did not provide substantial arguments to justify the challenge.4. **Validity of Reopening Assessment based on Retrospective Amendment:**The Court discussed the validity of reopening the assessment based on the retrospective amendment. It was established that the retrospective legislative amendment, which increased the book profit by the deferred tax liability, provided tangible material for the assessing officer to believe that income had escaped assessment. The Court cited precedents to support the validity of reopening assessments based on retrospective amendments.5. **Change of Incumbent of Office under Section 129:**The petitioner argued that the order rejecting objections was passed by an officer different from the one to whom objections were filed, contrary to section 129. The Court clarified that section 129 only applies in cases of a change in the incumbent of the office and does not prohibit the successor-in-office from passing orders on objections filed before the predecessor. The plea was found to lack merit.In conclusion, the Court dismissed the writ petition and imposed costs on the petitioner. The judgment upheld the validity of the notice issued under section 148, rejected challenges to the retrospective amendment under section 115JB, and clarified the application of section 129 regarding a change of incumbent of office.
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2013 (1) TMI 1067
The issues presented and considered in the judgment are as follows:1. Whether the petitioner was able to establish the loan amount given to the respondent and whether the respondent should be convicted for dishonoring the cheque issued in relation to the loan.2. Whether the petitioner was required to show the source of income for the loan amount given to the respondent.3. Whether the presumption of the cheque being issued in discharge of debt was dislodged by the respondent's explanation.The court analyzed the evidence and legal framework as follows:The petitioner alleged that he had given a loan of Rs. 9,30,000 to the respondent, who issued a post-dated cheque that was dishonored. The respondent claimed that the cheques were issued as security during a committee period and that the petitioner had surreptitiously filled in the amount on the cheque in question. The trial court acquitted the respondent based on the petitioner's failure to show the source of the loan amount and discrepancies in his statements.The court considered the legal provisions of the Negotiable Instruments Act and the Income-Tax Act, specifically Section 269SS, which requires loans above a certain amount to be reflected in the books of account. The court also referred to precedents, including the case of K. Prakashan Vs. P.K. Surenderan, which emphasized the need for the person advancing a loan to demonstrate solvency.The court found that the petitioner's failure to provide evidence of the source of the loan amount raised doubts about the truthfulness of his claim. The respondent's explanation, supported by witnesses, regarding the issuance of the cheques as security during the committee period was deemed credible. The court applied the principle that guilt must be proven beyond reasonable doubt in criminal cases and concluded that the doubt created by the respondent's evidence warranted the respondent's acquittal.The court's significant holdings include:1. The petitioner's failure to demonstrate the source of the loan amount cast doubt on the validity of his claim.2. The respondent's explanation regarding the issuance of the cheques as security during a committee period was supported by credible evidence.3. The benefit of doubt was rightly given to the respondent, leading to his acquittal.In conclusion, the court dismissed the leave to appeal petition, affirming the trial court's decision to acquit the respondent based on the lack of conclusive evidence regarding the loan transaction and the respondent's plausible explanation for the issuance of the cheques.
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2013 (1) TMI 1066
The petitioner challenged an arbitration award under Section 34 of the Arbitration and Conciliation Act, 1996, on the grounds of public policy violation and exceeding the terms of the contract. The petitioner argued that the award included amounts for escalation, idle labor, and equipment retention, which were prohibited by specific clauses in the contract. The contract involved constructing residential quarters, and a significant delay occurred due to the employer's default. The arbitrator awarded various claims to the contractor, finding the employer responsible for the delay.The petitioner contested the amounts awarded under certain heads, citing clauses 4.4.3, 17.1, and 18 of the contract's general conditions. The arbitrator interpreted these clauses to apply only during the contract duration and not beyond it. The arbitrator awarded damages for loss of hire charges and escalation costs, considering the employer's default as extending the contract period. The petitioner did not raise clause 18 before the arbitrator, and the awarded claims stemmed from the delay caused by the employer.The arbitrator's finding of a 20-month delay caused by the employer was not challenged. The petitioner cited legal precedents to argue that the arbitrator should not act against the contract terms, but the court found no violation in the award. The court emphasized its limited role in reviewing arbitral awards and dismissed the petitioner's challenge without calling the respondent.In conclusion, the court upheld the arbitration award, finding no valid grounds for challenging it. The court's role in such cases is supervisory, and unless there is clear perversity, public policy violations, or a complete non-application of law, the court does not extensively review arbitral awards. The petition was dismissed with costs.
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2013 (1) TMI 1065
1. ISSUES PRESENTED and CONSIDERED The core legal questions considered in this judgment are: - Whether the petitioner was an employee of the company or its American principal.
- Whether the petitioner is entitled to the claimed bonus and commission.
- Whether the company is liable to pay the petitioner based on the evidence presented.
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Employment Relationship - Relevant Legal Framework and Precedents: The determination of an employment relationship typically involves examining the contractual terms and the conduct of the parties.
- Court's Interpretation and Reasoning: The court scrutinized the appointment letter, pay slips, and tax certificates to ascertain the employment relationship.
- Key Evidence and Findings: The petitioner provided pay slips and tax deduction certificates from the company, indicating an employment relationship with the company rather than the American principal.
- Application of Law to Facts: The court found that the evidence demonstrated the company was responsible for paying the petitioner, thereby establishing the employment relationship with the company.
- Treatment of Competing Arguments: The company's argument that the petitioner was employed by the American principal was dismissed due to lack of substantial evidence and the presence of contradictory documentation.
- Conclusions: The court concluded that the petitioner was indeed an employee of the company.
Issue 2: Entitlement to Bonus and Commission - Relevant Legal Framework and Precedents: Entitlement to bonus and commission is generally governed by the terms of employment and any subsequent agreements or acknowledgments.
- Court's Interpretation and Reasoning: The court examined the email correspondences and the terms outlined in the appointment letter.
- Key Evidence and Findings: The email from Pratyush Bhowmick acknowledged a lump sum of US$5000 was payable to the petitioner, and subsequent correspondences indicated an agreement for a Rs.4 lakh bonus.
- Application of Law to Facts: The court applied the principle that admissions in correspondences can be binding and found that the company had acknowledged the petitioner's entitlement to the amounts claimed.
- Treatment of Competing Arguments: The company's argument that bonuses were contingent on profits was undermined by the specific acknowledgments of payment obligations in the emails.
- Conclusions: The court concluded that the petitioner was entitled to the claimed bonus and commission.
Issue 3: Liability of the Company - Relevant Legal Framework and Precedents: A company's liability to its employees is determined by its contractual obligations and any admissions of debt.
- Court's Interpretation and Reasoning: The court focused on the company's failure to dispute the authenticity of the evidence and its admissions in the correspondences.
- Key Evidence and Findings: The emails and lack of response to the statutory notice were critical in establishing the company's liability.
- Application of Law to Facts: The court applied the law by holding the company accountable for its admissions and failure to contest the claims effectively.
- Treatment of Competing Arguments: The company's defenses were deemed dishonest and insufficient to counter the documentary evidence.
- Conclusions: The court held the company liable for the payment of the claimed amounts.
3. SIGNIFICANT HOLDINGS - Preserve Verbatim Quotes of Crucial Legal Reasoning: "The company's defence is dishonest and its attempt at the final hearing to create a confusion does not only not impress, but it may be good grounds for the company to be wound up on the just and equitable count."
- Core Principles Established: The court reaffirmed the principle that documentary evidence, such as pay slips and emails, can establish employment relationships and financial obligations.
- Final Determinations on Each Issue: The court determined that the petitioner was an employee of the company, entitled to the claimed bonus and commission, and that the company was liable for the payment of these amounts.
In conclusion, the court admitted the petition for the principal sum of Rs. 4 lakh along with the Indian equivalent of US$5000, plus interest, and provided a timeline for the company to settle the payment to avoid further legal actions.
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2013 (1) TMI 1064
Issues Involved:
1. Entitlement of workers to interest on unpaid wages at par with secured creditors under Section 529A of the Companies Act, 1956.
2. Inclusion of bonus under the Payment of Bonus Act, 1965 as statutory dues under Section 530 of the Companies Act, 1956.
3. Classification of notice pay under Section 25 of the Industrial Disputes Act, 1947 as statutory dues under Section 530 of the Companies Act, 1956.
Issue-wise Detailed Analysis:
1. Entitlement of Workers to Interest at Par with Secured Creditors:
The primary issue was whether workers are entitled to interest on their dues at the same rate as secured creditors under Section 529A of the Companies Act, 1956. The appellants, representing workers' unions, argued that by virtue of the amendment in 1985, workers' dues are treated as secured and at par with secured creditors. They contended that the term "pari passu" implies equal treatment in all aspects, including interest on dues. The appellants relied on precedents from the Andhra Pradesh High Court and the Hon'ble Supreme Court, which they interpreted as supporting their claim to interest at the same rate as secured creditors.
The court, however, disagreed with this interpretation. It emphasized that while Section 529A entitles workers to receive their dues pari passu with secured creditors, this parity is limited to the payment of principal amounts and does not extend to interest. The court noted that the dictionary meaning of "pari passu" indicates equality in payment, not in the nature of dues. The court upheld the decision of the Kerala High Court, which had previously ruled that workers are not entitled to interest at par with secured creditors. Consequently, the court held that workers are not entitled to interest on their dues at the rate applicable to secured creditors.
2. Inclusion of Bonus as Statutory Dues:
The second issue concerned whether the bonus payable under the Payment of Bonus Act, 1965, qualifies as statutory dues under Section 530 of the Companies Act, 1956. The appellants argued that bonus is a statutory obligation and should be treated as a statutory due. However, the court rejected this argument, referring to the definition of "workmen's dues" under Section 529(3)(b) of the Companies Act, which does not include bonus. The court also cited the Hon'ble Supreme Court's decision in Hamdard (Wakf) Laboratories vs. Dy. Labour Commissioner, which clarified that wages do not include bonus. Therefore, the court concluded that bonus does not fall within the category of statutory dues under Section 530 and cannot be claimed pari passu with secured creditors.
3. Classification of Notice Pay as Statutory Dues:
The final issue was whether notice pay under Section 25 of the Industrial Disputes Act, 1947, should be classified as statutory dues under Section 530 of the Companies Act, 1956. The appellants contended that notice pay is a statutory obligation and should be treated as such. However, the court found no merit in this argument, reiterating that "workmen's dues" as defined in the Companies Act do not encompass notice pay. Consequently, the court determined that notice pay does not qualify as a statutory due under Section 530.
Conclusion:
The court dismissed both appeals, affirming that workers are not entitled to interest on their dues at the same rate as secured creditors, and that neither bonus nor notice pay qualifies as statutory dues under the relevant sections of the Companies Act. The judgment emphasized the distinction between parity in payment and parity in the nature of claims, thereby upholding the original orders of the Company Court.
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2013 (1) TMI 1063
Issues Involved:
1. Refund of the amount for land short-delivered.
2. Consideration of separate plots for determining the shortfall.
3. Applicability of terms and conditions of sale.
4. Reliance on previous judgments and pending appeals.
Issue-wise Detailed Analysis:
1. Refund of the amount for land short-delivered:
The appellant sought a refund of Rs. 79,16,809.21, claiming that the land delivered was less than what was conveyed in the deed. Specifically, Final Plot No. 131 was found to be 9,569.50 sq meters instead of the 12,076 sq meters stated, resulting in a shortfall of 2,506.50 sq meters. The learned Company Court dismissed the application for a refund, considering the shortfall to be less than 5% of the total area of 57,254 sq meters, thus not substantial enough to warrant a refund. The Court relied on previous decisions where a shortfall of less than 5% was deemed insubstantial.
2. Consideration of separate plots for determining the shortfall:
The appellant argued that the plots, Final Plot Nos. 130 and 131, should have been considered separately. The shortfall in Final Plot No. 131 alone was about 19%, which, according to the appellant, should entitle them to a refund. However, the Court noted that the offer was composite for both plots, and the total area shortfall was less than 5% when combined. The Court held that the terms of the sale were clear, and the offer was not made for individual plots but for the combined area.
3. Applicability of terms and conditions of sale:
The sale was conducted on an 'as is where is and whatever there is basis,' as per the tender conditions. The appellant was expected to verify the measurements and records before purchase. The Court emphasized that the purchaser, having accepted these terms, could not later claim a refund based on discrepancies in land measurement. The Supreme Court's precedent in United Bank of India Vs. Official Liquidator was cited, highlighting that the Official Liquidator does not guarantee the property details and it is the purchaser's responsibility to conduct due diligence.
4. Reliance on previous judgments and pending appeals:
The appellant contested the reliance on a previous judgment (Company Application No. 427/2004), which was pending appeal. However, the Court noted that the appeal had since been dismissed, reinforcing the validity of the previous judgment. The Court found no error in the learned Company Judge's reliance on this precedent, as the context and legal principles applied were consistent with the current case.
Conclusion:
The appeal was dismissed, with the Court finding no error in the learned Company Court's decision. The shortfall in land delivery was not deemed substantial enough to merit a refund, given the terms of sale and the composite nature of the offer. The appellant's arguments regarding separate consideration of plots and reliance on pending appeals were not upheld. The decision emphasized the importance of adhering to the terms of sale and conducting thorough due diligence before purchase.
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2013 (1) TMI 1062
Issues Involved:
1. Validity of the will executed by Shiv Singh.
2. Nature of the suit land (ancestral or self-acquired).
3. Maintainability of the appeal by Defendant No. 5 under Section 100 of the Code of Civil Procedure, 1908.
4. Legal rights of Defendant No. 5 as an aggrieved party.
Detailed Analysis:
1. Validity of the Will Executed by Shiv Singh:
The Plaintiff, Sarabjit Singh, challenged the will executed in favor of Defendant Nos. 1 to 4, alleging it was forged and not executed voluntarily by Shiv Singh. The trial court found that Defendant Nos. 1 to 4 failed to dispel the suspicious circumstances surrounding the execution of the will and declared it null and void. However, the appellate court reversed this finding, holding that the will dated 6.7.1989 was validly executed and the trial court's finding was unsustainable.
2. Nature of the Suit Land (Ancestral or Self-Acquired):
The Plaintiff claimed that the suit land was ancestral coparcenary and Joint Hindu Family property, which Shiv Singh, as the Karta, had no right to bequeath solely to Defendant Nos. 1 to 4. The trial court agreed with this view, but the appellate court concluded that the property was self-acquired by Shiv Singh, making him competent to alienate it as he wished.
3. Maintainability of the Appeal by Defendant No. 5 under Section 100 of the Code of Civil Procedure, 1908:
The High Court dismissed the appeal filed by Defendant No. 5 on the grounds that he was not an aggrieved party under Section 100 of the Code. The High Court relied on precedents like Smt. Ganga Bai v. Vijay Kumar and Ors. and Banarsi and Ors. v. Ram Phal, which distinguish between the inherent right to file a suit and the limitations in maintaining an appeal. The High Court held that the Defendant No. 5 could not appeal against a mere finding as the Code does not provide for such an appeal.
4. Legal Rights of Defendant No. 5 as an Aggrieved Party:
The Supreme Court found that the High Court erred in its interpretation. It emphasized that Sections 96 and 100 of the Code do not enumerate the categories of persons who can file an appeal but allow any person prejudicially affected by a judgment and decree to do so. The Supreme Court cited various precedents, including Smt. Jatan Kanwar Golcha v. Golcha Properties Private Ltd. and State of Punjab v. Amar Singh and Anr., to support the view that a person not a party to the suit may appeal if prejudicially affected by the judgment. The Court concluded that Defendant No. 5, who supported the Plaintiff's case and was prejudicially affected by the appellate court's decree, had the right to appeal.
Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's judgment, and remitted the matter to the High Court to decide the appeal within six months. The Supreme Court clarified that it had not expressed any opinion on the merits of the case and directed that the parties bear their respective costs.
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2013 (1) TMI 1061
Issues Involved:
1. Determination of the indexed cost of acquisition for inherited property.
2. Interpretation of relevant sections of the Income Tax Act, including sections 2(42A), 48, 49, and 55.
3. Application of judicial precedents and conflicting judgments.
Issue-wise Detailed Analysis:
1. Determination of the Indexed Cost of Acquisition for Inherited Property:
The primary issue was whether, for calculating the indexed cost of acquisition of an inherited property, the period during which the previous owner held the asset should be included. The Assessing Officer (AO) argued that the indexation should start from the financial year 2000-01, when the assessee inherited the property from her mother. The AO relied on Explanation 3 of section 48 of the Income Tax Act, which defines "Indexed cost of acquisition" as the cost inflation index for the year in which the asset is transferred relative to the cost inflation index for the first year in which the asset was held by the assessee.
The assessee contended that the period during which the previous owner held the asset should be included in determining the indexed cost of acquisition, citing Explanation 1(b) to section 2(42A) and section 49 of the Income Tax Act. The assessee argued that the cost of acquisition should be deemed to be the cost for which the previous owner acquired it, and the indexation should be applied from the year 1981-82, when the previous owner (the mother) held the property.
2. Interpretation of Relevant Sections of the Income Tax Act:
The assessee's interpretation was supported by a coherent reading of sections 2(42A), 48, 49, and 55 of the Income Tax Act, which collectively suggest that the period of holding by the previous owner should be included for the purpose of determining the indexed cost of acquisition. The assessee argued that the legislative intent was to treat the date and cost of acquisition of the previous owner as the date and cost of acquisition for the assessee.
The AO, however, contended that the language of Explanation (iii) to section 48 was different from sections 2(42A), 55(1)(b)(ii), and 55(2)(b)(ii), and did not refer to the previous owner. The AO relied on the case of DCIT vs Kishore Kanungo, where it was held that the period of holding by the previous owner is considered for determining whether the asset is a long-term or short-term capital asset, but not for indexation purposes.
3. Application of Judicial Precedents and Conflicting Judgments:
The CIT(A) sided with the assessee, relying on the decision of the Special Bench in the case of DCIT vs. Manjula J. Shah, which overruled the Kishore Kanungo judgment. The Special Bench held that for computing long-term capital gains on inherited property, the indexed cost of acquisition should be computed with reference to the year in which the previous owner first held the asset. This interpretation was based on a schematic reading of the relevant provisions to produce the desired effect, aligning with the legislative intent.
The revenue, dissatisfied with the CIT(A)'s decision, appealed to the Tribunal. The revenue's representative argued that the indexation should begin from the year the assessee became the owner, as per Explanation (iii) to section 48, and cited the case of Ravi Kumar Narula vs CIT, where the Delhi High Court decided in favor of the revenue. However, the assessee's representative countered that the Ravi Kumar Narula case dealt with the nature of capital gains (long-term or short-term) and not indexation.
Tribunal's Decision:
The Tribunal upheld the CIT(A)'s decision, agreeing with the Special Bench's interpretation in the Manjula J. Shah case. The Tribunal found that the assessee became the owner of the property by virtue of a will in FY 2000-01, while the mother held the property before 01.04.1981. Therefore, for the purpose of calculating the indexed cost of acquisition, the period during which the previous owner held the asset should be included. The Tribunal dismissed the revenue's appeal, affirming that the CIT(A) had rightly deleted the addition made by the AO.
Conclusion:
The Tribunal concluded that for inherited property, the indexed cost of acquisition should be computed by including the period during which the previous owner held the asset. This decision aligns with the legislative intent and the Special Bench's interpretation in the Manjula J. Shah case. The revenue's appeal was dismissed, and the CIT(A)'s order was upheld.
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2013 (1) TMI 1060
Issues involved: Challenge to the order of the Income Tax Appellate Tribunal under section 260A of the Income Tax Act regarding deletion of addition of Rs.1,07,27,834 made by the Assessing Officer.
Summary:
1. The Revenue challenged the ITAT order regarding the deletion of the addition of Rs.1.07 crores made by the Assessing Officer, questioning the genuineness of credits. The Assessing Officer treated the amount as unexplained and unverifiable, leading to the addition to the assessee's income.
2. The CIT(A) deleted the entire addition after finding that payments were made by the assessee through Account Payee cheques and were credited in the bank accounts of the creditors. It emphasized that the bank details sufficiently proved the existence of creditors, and if the Assessing Officer was dissatisfied, further inquiry could have been made.
3. The Tribunal upheld the CIT(A)'s decision, noting that the Assessing Officer failed to show that the liability of the total sum had ceased to exist, making section 41(1) inapplicable. The Tribunal concurred with the evidence presented by the assessee and found no illegality in the orders.
4. The issue revolved around the factual matrix presented, with both the CIT(A) and the Tribunal basing their decisions on the evidence produced by the assessee. The Revenue could not demonstrate any perversity or illegality in the orders.
5. The High Court found no further merits in the issue and dismissed the Tax Appeal without elaboration.
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2013 (1) TMI 1059
Issues Involved:
1. Treatment of income from the sale of shares: Whether taxable under "Business Income" or under "Long Term Capital Gains" and "Short Term Capital Gains".
Summary:
Issue 1: Treatment of Income from Sale of Shares
The primary issue in this appeal is the classification of income from the sale of shares, whether it should be taxed as "Business Income" as determined by the Assessing Officer (AO) or as "Long Term Capital Gains" (LTCG) and "Short Term Capital Gains" (STCG) as claimed by the assessee.
Facts of the Case:
The assessee, an individual, reported income under "Share Trading," "Capital Gains," and "Income From Other Sources." The AO, considering the regularity, volume, turnover, period of holding, and value of transactions, concluded that the income reported as LTCG and STCG should be classified as "Business Income."
Assessee's Argument:
The assessee argued that similar transactions were treated as capital gains in previous assessment years under scrutiny proceedings u/s 143(3) of the Income Tax Act, 1961. The assessee also relied heavily on the judgment of the Hon'ble Jurisdictional High Court in CIT v/s Gopal Purohit.
Commissioner (Appeals) Decision:
The Commissioner (Appeals) accepted the assessee's contentions, following the judgment in Gopal Purohit and previous decisions, and reversed the AO's action, holding that the income from the sale of shares should be taxed under LTCG and STCG.
Revenue's Argument:
The Revenue argued that the findings from earlier years are not res judicata for the current year and emphasized that the AO had sufficiently demonstrated that the assessee was regularly dealing in shares, thus justifying the classification of income as "Business Income."
Tribunal's Analysis:
The Tribunal reviewed the details of the transactions and the holding periods of the shares. It noted that the majority of the shares were held for periods ranging from two to ten years or more for LTCG and between 30 to 360 days for STCG. The Tribunal also considered previous decisions in the assessee's own case, where similar issues were decided in favor of the assessee, treating the income from share transactions as LTCG and STCG.
Tribunal's Decision:
The Tribunal upheld the Commissioner (Appeals)'s decision, affirming that the income from the sale of shares should be taxed under LTCG and STCG, consistent with the treatment in previous and subsequent years. The Tribunal dismissed the Revenue's appeal, concluding that the income from share transactions should not be treated as "Business Income."
Conclusion:
The appeal by the Revenue was dismissed, and the order pronounced in the open Court on 31st January 2013 confirmed that the income from the sale of shares should be taxed under LTCG and STCG as declared by the assessee.
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2013 (1) TMI 1058
Issues Involved
1. Whether the land in question was an evacuee land on the date of issue of Notification u/s 4 of the LA Act on 07.03.1962?
2. Whether the land, if it was an evacuee property, could have been acquired under the law?
Summary
Issue 1: Whether the land in question was an evacuee land on the date of issue of Notification u/s 4 of the LA Act on 07.03.1962?
The Supreme Court examined the facts and legal provisions to determine the status of the land. The land in question was acquired by the central government u/s 12 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954, and became part of the compensation pool u/s 14. The appellant's husband participated in a public auction for the sale of the property, and his bid was accepted on 31.10.1960. However, the full purchase price was paid only in 1980, and the sale certificate was issued on 22.08.1980. The court held that the ownership could have transferred to the appellant only in 1980 when the full purchase price was paid. However, provisional possession given to the appellant's husband in 1960 created an encumbrance in the property, making it subject to acquisition under the LA Act.
Issue 2: Whether the land, if it was an evacuee property, could have been acquired under the law?
The court examined whether the land, being an evacuee property, could be acquired under the LA Act. The court referred to the legal position that the government cannot acquire its own land unless there are private rights or encumbrances. The court found that an encumbrance was created in 1960 when provisional possession was given to the appellant's husband. Therefore, the land could be acquired under the LA Act. The court also referred to the decision in Madan Lal Nangia (2003) 10 SCC 321, which held that evacuee properties could be acquired for public purposes.
Conclusion
The Supreme Court upheld the decision of the Division Bench of the Delhi High Court, which set aside the Single Judge's order quashing the acquisition notification. The court found that the land could be acquired under the LA Act due to the encumbrance created in 1960. The appeal was dismissed with no order as to costs. However, the court clarified that the appellant's claim for compensation or any other monetary claim would be considered on its own merits in accordance with the law.
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2013 (1) TMI 1057
Issues Involved:
1. Disallowance of expenditure on 20 Point Programme
2. Addition of notional amount u/s. 14A towards expenditure to earn tax-free income
3. Additions u/s. 145A on account of net modvat credit receivable on raw material not considered in the value of closing stock
4. Right to use technical know-how - Disallowance of 100% claim u/s. 37(1) and allowance of 1/6th u/s. 35AB
5. Provision towards post-retirement medical benefit
6. Disallowance of claim of deduction u/s. 80HH, 80I/IA on LPG Bottling plants
7. Tax u/s. 115O for dividend paid to Government of India
8. Additional Grounds: Deduction u/s. 37(1) towards detailed feasibility study expenses and Deduction u/s. 35(1)(ii) contribution to LERC
Summary:
1. Disallowance of Expenditure on 20 Point Programme:
The Tribunal allowed the expenditure incurred u/s. 37(1) towards the 20 Point Programme, following its own earlier decisions and judgments from the Hon'ble Karnataka High Court and the Hon'ble Supreme Court. It was held that such expenditure, even if altruistic, is deductible if it serves business interests.
2. Addition of Notional Amount u/s. 14A:
The Tribunal set aside the issue to the CIT(A) for a proper finding on whether the investments in tax-free bonds were made from surplus funds or borrowed funds. The CIT(A) was directed to verify these details and decide accordingly.
3. Additions u/s. 145A on Account of Net Modvat Credit:
The ground was dismissed as not pressed by the assessee since the impact of the addition in the closing stock was given to the next year's opening stock.
4. Right to Use Technical Know-How:
The Tribunal upheld the disallowance of 100% claim u/s. 37(1) and allowed only 1/6th u/s. 35AB, following the assessee's admission and the Tribunal's earlier decisions.
5. Provision Towards Post-Retirement Medical Benefit:
The Tribunal set aside the issue to the Assessing Officer to allow the claim based on the Actuarial valuation report, following its earlier decision for A.Y. 1997-98.
6. Disallowance of Claim of Deduction u/s. 80HH, 80I/IA on LPG Bottling Plants:
The Tribunal allowed the deduction, holding that the bottling of LPG is a manufacturing activity, following the Hon'ble High Court's decision and earlier Tribunal orders.
7. Tax u/s. 115O for Dividend Paid to Government of India:
This ground was dismissed as not pressed by the assessee.
8. Additional Grounds:
- Deduction u/s. 37(1) towards detailed feasibility study expenses was not admitted as it was not claimed in the return of income or before the lower authorities.
- Deduction u/s. 35(1)(ii) on contribution to LERC was allowed for examination by the Assessing Officer to ensure the correct allowance of 125% deduction instead of 100%.
Conclusion:
The appeals were partly allowed for statistical purposes, with specific directions for verification and re-examination by the Assessing Officer and CIT(A) on various grounds.
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2013 (1) TMI 1056
Issues Involved:
1. Whether the High Court was justified in reversing the acquittal by the trial Court.
2. Whether the absence of a charge u/s 34 IPC prejudiced the appellants.
3. Whether the evidence supported the conviction for murder u/s 302 IPC.
Summary:
1. Reversal of Acquittal by High Court:
The High Court reversed the trial Court's acquittal and convicted the appellants u/s 302 read with Section 34 IPC, sentencing them to life imprisonment and a fine. The appellants were also convicted u/s 324 read with Section 34 IPC and sentenced to three months of simple imprisonment. The Supreme Court noted that the appellate court has full power to review and re-appreciate evidence and may reverse an acquittal if the view taken by the trial Court is not reasonably possible. The High Court's interference was justified as the trial Court's acquittal was not a reasonably possible view.
2. Absence of Charge u/s 34 IPC:
The appellants contended that their conviction u/s 302 read with Section 34 IPC was unjustified as they were not charged under Section 34 IPC. The Supreme Court held that the absence of a charge u/s 34 IPC does not automatically result in prejudice. The Court cited precedents where convictions were upheld despite the absence of a specific charge under Section 34 IPC, provided no prejudice was caused to the accused. The appellants failed to demonstrate any prejudice resulting from the absence of the charge, and thus, the conviction was upheld.
3. Evidence Supporting Conviction for Murder:
The appellants argued that there was no evidence of common intention to commit murder. The Supreme Court rejected this argument, noting that the appellants had threatened the deceased the previous day and were lying in wait for him, indicating premeditation. The nature of the injuries inflicted, the use of stout sticks, and the continued assault even after the deceased fell, all pointed to a common intention to kill. The evidence, including the credible testimony of PW-1 and other witnesses, supported the conviction for murder.
Conclusion:
The appeal was dismissed, affirming the High Court's judgment convicting the appellants u/s 302 read with Section 34 IPC and u/s 324 read with Section 34 IPC. The Supreme Court found no error in the High Court's decision and upheld the sentences imposed.
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2013 (1) TMI 1055
Issues involved: Petition under Section 482 of CrPC seeking quashing of a complaint under Section 138 of Negotiable Instrument Act, 1881.
Details of the Judgment:
Issue 1: Allegations against the Petitioner
The complaint arose from a dishonored cheque drawn by the petitioner's husband, where the petitioner was a joint account holder but did not issue the cheque. The petitioner argued that she cannot be held liable under Section 138 of the Act as she did not draw or issue the cheque.
Issue 2: Arguments of the Petitioner
The petitioner's counsel contended that the petitioner's role in the complaint was not explicitly disclosed, emphasizing that being a joint account holder does not automatically make her vicariously liable for the dishonored cheque under Section 138 of the Act.
Issue 3: Respondent's Position
The respondent argued that since the petitioner and her husband jointly purchased the flat and the cheque was issued from their joint account, the petitioner cannot disassociate herself from the issuance of the dishonored cheque.
Issue 4: Legal Analysis
The court examined Section 138 of the Negotiable Instruments Act, 1881, emphasizing that the liability of the drawer of a cheque does not extend to joint account holders unless specifically implicated. The court highlighted that penal provisions should be strictly construed.
Issue 5: Judgment
The court found merit in the petitioner's submissions, ruling that the complaint against the petitioner lacked sufficient grounds as she was merely a joint account holder and not directly involved in the issuance of the dishonored cheque. The petition was allowed, quashing the complaint against the petitioner while allowing the trial to proceed against the husband.
Conclusion
The petition under Section 482 of CrPC was allowed, quashing the complaint against the petitioner while maintaining the trial against the husband.
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2013 (1) TMI 1054
Issues Involved:
1. Nature of transport subsidy.
2. Addition of subsidy relating to electricity/power tariff freeze.
3. Allowability of claim of deduction on account of additional gratuity paid.
4. Deduction on account of compensatory charges.
5. Disallowance of railways and insurance claims written off.
6. Deduction of expenditure incurred in respect of quartz project.
7. Various claims of deduction not pressed by the assessee.
8. Additional grounds raised by the assessee.
9. Disallowance of contribution to Himachal Pradesh State Electricity Board.
10. Allowability of VRS expenditure.
11. Allowability of claim of expenditure in respect of temporary structures.
12. Allowability of expenditure incurred on construction of stadium.
13. Allowability of claim of interest paid on borrowed funds in connection with investment.
Summary:
1. Nature of Transport Subsidy:
The first dispute concerns the nature of transport subsidy amounting to Rs. 13,78,51,483/-. The Tribunal followed its decision in the assessee's own case for the assessment year 1999-00, where the subsidy was treated as a capital receipt based on the judgment of CIT vs. Reliance Industries. Consequently, the Tribunal set aside the order of CIT(A) and allowed the claim of the assessee.
2. Addition of Subsidy Relating to Electricity/Power Tariff Freeze:
The second dispute pertains to the addition of Rs. 2,63,51,000/- related to electricity duty under the H.P. incentive scheme-1991. The Tribunal, following its earlier decision and the judgment of CIT vs. Reliance Industries, held that the subsidy was capital in nature and set aside the order of CIT(A), allowing the claim of the assessee.
3. Allowability of Claim of Deduction on Account of Additional Gratuity Paid:
The third dispute regards the deduction of Rs. 4,53,19,214/- on account of additional gratuity paid. The assessee did not press this ground during the hearing, and thus, it was dismissed as not pressed.
4. Deduction on Account of Compensatory Charges:
The fourth ground involves various compensatory charges. The assessee did not press the grounds relating to the use of diesel and interest on delayed payment of TDS, and these disallowances were upheld. However, the Tribunal found that the issue of payment for not carrying out mining activity required fresh examination and restored it to the AO for a fresh order.
5. Disallowance of Railways and Insurance Claims Written Off:
The fifth dispute concerns the disallowance of Rs. 41,96,766/- on account of unsettled railway and insurance claims. The Tribunal noted that the exact nature of the claims was unclear and required fresh examination by the AO, thus setting aside the order of CIT(A).
6. Deduction of Expenditure Incurred in Respect of Quartz Project:
The sixth dispute involves the deduction of Rs. 73,37,000/- related to the quartz project. The Tribunal found that the matter required fresh examination due to unclear facts and restored it to the AO for a fresh order.
7. Various Claims of Deduction Not Pressed by the Assessee:
Grounds relating to claims of deduction u/s 80HHC, 80IA, and 80IB were not pressed by the assessee and were dismissed as not pressed.
8. Additional Grounds Raised by the Assessee:
The assessee raised several additional grounds, including claims for interest on borrowings, sales tax incentive, provision of additional gratuity, and relief u/s 91. The Tribunal admitted these additional grounds for adjudication, allowing some claims and restoring others to the AO for fresh examination.
9. Disallowance of Contribution to Himachal Pradesh State Electricity Board:
The revenue's appeal concerning the disallowance of contribution to HPSEB was dismissed, with the Tribunal following its earlier decision and confirming the order of CIT(A) in favor of the assessee.
10. Allowability of VRS Expenditure:
The revenue's appeal against the allowability of VRS expenditure of Rs. 29,09,85,056/- was dismissed, with the Tribunal following its earlier decision and confirming the order of CIT(A).
11. Allowability of Claim of Expenditure in Respect of Temporary Structures:
The revenue's appeal against the allowability of expenditure on temporary structures was dismissed. The Tribunal upheld the CIT(A)'s order, noting that the expenditure was reasonable and incurred on land not belonging to the assessee.
12. Allowability of Expenditure Incurred on Construction of Stadium:
The revenue's appeal against the allowability of expenditure on the construction of a stadium was dismissed, with the Tribunal following its earlier decision and confirming the order of CIT(A).
13. Allowability of Claim of Interest Paid on Borrowed Funds in Connection with Investment:
The revenue's appeal concerning the disallowance of interest on borrowed funds was dismissed. The Tribunal upheld the CIT(A)'s order, noting that the assessee had sufficient funds to make investments and following its earlier decision.
Conclusion:
The appeal of the assessee was partly allowed, while the appeal of the revenue was dismissed.
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2013 (1) TMI 1053
The Bombay High Court heard a case regarding the tax treatment of license fees received for transfer of user rights of software "OPUS" to Indian Companies. The court considered whether the fees constituted "royalty" under the Income Tax Act and the India-Germany DTAA. The decision also involved the retrospective effect of an amendment clarifying the definition of royalty for software rights.
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2013 (1) TMI 1052
Issues Involved:
1. Allegations of administering intoxicants and outraging modesty u/s 328 and 354 IPC.
2. Allegations of rape based on false promise of marriage u/s 376 IPC.
3. Validity of the FIR and chargesheet based on the complainant's statements.
4. High Court's jurisdiction to quash criminal proceedings u/s 482 CrPC.
Summary:
Issue 1: Allegations of Administering Intoxicants and Outraging Modesty u/s 328 and 354 IPC
The complainant alleged that on 15.2.2007, the appellant-accused offered her a cold drink containing an intoxicating substance and misbehaved with her by touching her breasts. However, the medical report from AIIMS on 16.2.2007 showed no evidence of poisoning. The appellant-accused was arrested based on the complainant's statement, but subsequent mobile phone call details verified by the investigating officer indicated that the appellant-accused was not present at the alleged place of occurrence.
Issue 2: Allegations of Rape Based on False Promise of Marriage u/s 376 IPC
In her supplementary statement on 21.2.2007, the complainant alleged that the appellant-accused had physical relations with her on the assurance of marriage. However, evidence revealed that the complainant was married to another man during the dates of the alleged incidents, making the assertion of inducement for marriage false. The medical examination conducted on 21.2.2007 could not verify the allegations due to the delay in reporting.
Issue 3: Validity of the FIR and Chargesheet Based on the Complainant's Statements
The chargesheet filed on 28.6.2007 mentioned that the investigation did not yield any positive results and was based solely on the complainant's statement. The High Court dismissed the appellant-accused's petition to quash the FIR, stating that a false FIR must be brought to its logical conclusion. The complainant also filed a petition to quash the FIR, which was dismissed by the High Court.
Issue 4: High Court's Jurisdiction to Quash Criminal Proceedings u/s 482 CrPC
The Supreme Court examined whether the High Court should have quashed the proceedings. It was established that the material relied upon by the appellant-accused was of sterling quality, ruling out the assertions in the charges. The complainant's allegations were found to be false based on irrefutable evidence, including her marital status and the absence of scientific proof of the alleged crimes.
Conclusion:
The Supreme Court concluded that the allegations against the appellant-accused would not lead to a conviction. The FIR, chargesheet, and framing of charges were quashed, and the criminal proceedings were dismissed. The judgment emphasized the importance of exercising caution and circumspection in quashing criminal proceedings u/s 482 CrPC to prevent abuse of process and secure the ends of justice.
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2013 (1) TMI 1051
The High Court of Punjab and Haryana dismissed the writ petition in C.W.P. No.13288 of 2012, allowing the petitioner to appeal against the order by the Customs, Excise, and Service Tax Appellate Tribunal. (Citation: 2013 (1) TMI 1051)
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2013 (1) TMI 1050
The High Court of Jharkhand disposed of the petition as all matters were handed over to the C.B.I. The petitioner can approach the court again if there is no progress in the investigation within a reasonable time.
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2013 (1) TMI 1049
Issues Involved:
1. Legality of High Court's quashing of the Magistrate's order taking cognizance u/s 406 and 420 IPC.
2. Examination of whether the allegations constituted criminal offenses or were purely civil in nature.
3. Analysis of the High Court's exercise of extraordinary jurisdiction under Articles 226 and 227 of the Constitution.
Issue-wise Comprehensive Details:
1. Legality of High Court's Quashing of the Magistrate's Order:
The Supreme Court examined the High Court's decision to quash the Magistrate's order taking cognizance under Sections 406 and 420 of the Indian Penal Code (IPC). The High Court had quashed the order against the wife (Respondent No. 2) on the grounds that there was no entrustment of any property by the complainant to her and no privity of contract existed. The Supreme Court found that the High Court had erred in its conclusion, noting that the allegations against the wife included her involvement in the negotiation and acceptance of money, which prima facie constituted a criminal offense.
2. Examination of Whether the Allegations Constituted Criminal Offenses:
The Supreme Court analyzed the nature of the allegations made in the FIR, protest petition, and the investigation records. The Court noted that both the Magistrate and the Sessions Judge had found prima facie evidence of criminal culpability, including fraudulent and dishonest intention from the beginning of the negotiation. The Court emphasized that civil disputes can also contain elements of criminal offenses, and if such elements are present, criminal proceedings should be allowed to continue.
3. Analysis of the High Court's Exercise of Extraordinary Jurisdiction:
The Supreme Court criticized the High Court for exercising its extraordinary jurisdiction to quash the cognizance order without proper consideration of the allegations and material on record. The Court highlighted that the High Court should adopt a cautious approach and not interfere with legitimate prosecutions unless the complaint is found to be mala fide, frivolous, or vexatious. The Supreme Court concluded that the High Court had not adhered to sound legal principles and had prematurely quashed the proceedings against the wife.
Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's order, and directed the Magistrate to proceed in accordance with the law. The Court clarified that its observations were limited to the order taking cognizance and did not reflect any opinion on the merits of the case. The Magistrate was instructed to decide the case on its own merits without being influenced by the Supreme Court's observations.
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